Travis Perkins plc has presented its Q3 trading update for the three months to 30 September 2024.
Group revenue declined by (5.7)% in the quarter, with like-for-like revenue down by (6.8)%. In the Merchanting segment revenue was revealed to have been (8.2)% lower on a like-for-like basis, driven by the General Merchant category “which has seen a loss of market share over the summer.”
The updated noted that “both volume and margin in the General Merchant have underperformed expectations with volume continuing to decline despite recent changes to optimise pricing.” It continued: “More widely the market remains mixed, with ongoing competitive intensity in some of the Group’s Specialist Merchanting businesses but early signs of returning confidence in others.”
Toolstation, however, “delivered a robust performance with growth of 2.9% in the quarter in the UK and Benelux like-for-like sales up 9.6%.” Toolstation France, meanwhile, “remains on track for full closure by the end of FY24, with 8 branches being sold to Quincaillerie Angles as a going concern and the remaining 43 branches, alongside the transactional website, having now ceased trading.”
Pete Redfern, the recently-appointed Chief Executive of Travis Perkins plc, commented: “My first few weeks at Travis Perkins Group have reaffirmed that this is a business with many strengths – the quality of our nationwide branch network, strong customer and supplier relationships and, above all, an experienced team of branch managers and commercial leaders within the business.
“However, it is clear that the Group has allowed itself to become distracted and overly internally focused which has led to the underperformance in recent periods. We now need to get back to a focus on operational execution – delivering great products and great customer service and better leveraging our reach and scale.”
Pete continued: “Over the last nine months the team has made good progress on implementing cost discipline, improving working capital management and exiting Toolstation France. In addition to supporting these ongoing actions, my immediate priorities are driving and incentivising branch-led performance and motivation, identifying further ways to make the business run more efficiently and ensuring that we turn and face the anticipated recovery in the UK construction market.
“During this important period, I will combine the roles of Group Chief Executive and Managing Director of the Travis Perkins General Merchant business. This will allow me to shorten reporting lines and develop our new strategy, working closely with the operational leaders of this business as well as the Group Leadership Team. I am confident that together we can bring significant improvements in performance and the execution of change.”
He concluded: “I look forward to working with Geoff, Duncan and the wider Board over the coming months to shape the future of the business. We will provide a further update with the full year results.”
Outlook
The report stated: “Given the shortfall in the Merchanting segment, the Board now expects FY24 adjusted operating profit to be around £135m.
“Overall, the Group’s key end markets are stabilising with some very early signs of recovery. Management expects to see positive growth in these underlying markets over the next twelve months, but that this growth will be slow and non-linear at the outset, with the benefit to financial performance starting to be realised in the second half of 2025.”
Click here for more detail on the Travis Perkins plc Q3 trading update.
